FRANKFURT, April 29 (Reuters) - Venezuela should urgently
release $3.9 billion owed to airlines over ticket sales, the
International Air Transport Association (IATA) said on Tuesday,
saying the government was not keeping to promises to offer fair
exchange rates.

The South American nation requires airlines to bill tickets
in its bolivar currency and for close to two years the state
currency board has denied airline requests to convert ticket
sales revenues into hard currency and repatriate the funds.

The Venezuela government said at the end of March that it
would allow foreign airlines to repatriate the money, using the
exchange rate in place at the time the fares were sold.

"Since then there has been very little progress," IATA Chief
Executive Tony Tyler said in a statement. "The situation is
unacceptable."

IATA said that the Venezuelan government had made offers to
release some of the airlines' funds, but at lower exchange rates
or at a discount, offers that were rejected by airlines.

"Airlines are committed to serving the Venezuelan market but
they cannot sustain operations indefinitely if they can't get
paid," Tyler said.

Airlines such as Germany's Lufthansa have reduced
services to the country, while Air Canada, has stopped
services altogether, citing security concerns related to street
protests.

IATA said the currency controls affected 24 airlines, 11 of
which had reduced operations by between 15 and 78 percent over
the last year.

Other airlines flying to the country include American
Airlines, Delta, Avianca and Copa
.
(Reporting by Victoria Bryan; editing by Jason Neely)